Question 1

A monopsonist can pick the ____, while a monopolist can pick ____.

Accepted Answer

A)  the price it will charge; the wage it will pay 
B)  the wage it will pay; the price it will charge 
C)  the market price for its output; the quantity it will produce 
D)  marginal product of labor; the marginal cost of labor 
E)  number of competitors; the number of buyers 
A)  the price it will charge; the wage it will pay 
B)  the wage it will pay; the price it will charge 
C)  the market price for its output; the quantity it will produce 
D)  marginal product of labor; the marginal cost of labor 
E)  number of competitors; the number of buyers B

Question 2

The firm's demand for labor curve is exactly the same as the:

Accepted Answer

A)  wage rate. 
B)  price of the output. 
C)  MRP curve. 
D)  MP curve. 
E)  labor supply curve. 
A)  wage rate. 
B)  price of the output. 
C)  MRP curve. 
D)  MP curve. 
E)  labor supply curve. C

Question 3

Exhibit 11-8 A labor market  
-If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point: ​

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  F. 
A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  F. B

Question 4

When a firm hires an additional unit of labor, the increase in a firm's total revenues is known as the marginal:

Accepted Answer

A)  cost. 
B)  product. 
C)  utility product. 
D)  revenue product. 
A)  cost. 
B)  product. 
C)  utility product. 
D)  revenue product.

Question 5

Explain how the presence of a superstar basketball player can increase the marginal revenue product of the other players on the team.

Accepted Answer

The superstar is a complement, raising t

Question 6

For a competitive firm, workers' marginal revenue product equals the marginal product of labor times the:

Accepted Answer

A)  wage rate. 
B)  price of the firm's product. 
C)  interest rate. 
D)  firm's total revenue. 
A)  wage rate. 
B)  price of the firm's product. 
C)  interest rate. 
D)  firm's total revenue.

Question 7

Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:

Accepted Answer

A)  $10. 
B)  $14. 
C)  $120. 
D)  $140. 
E)  $240. 
A)  $10. 
B)  $14. 
C)  $120. 
D)  $140. 
E)  $240.

Question 8

Exhibit 11-9 A labor market  
-If the labor market shown in Exhibit 11-9 is a monopsony, the wage rate and number of workers employed will be determined at point: ​

Accepted Answer

A)  A. 
B)  W. 
C)  C. 
D)  Y. 
E)  Z. 
A)  A. 
B)  W. 
C)  C. 
D)  Y. 
E)  Z.

Question 9

As compared to a firm that competes for labor, a monopsony will:

Accepted Answer

A)  hire fewer workers and pay lower wages. 
B)  hire fewer workers by pay higher wages. 
C)  pay lower wages but hire more workers. 
D)  pay higher wages and hire more workers. 
A)  hire fewer workers and pay lower wages. 
B)  hire fewer workers by pay higher wages. 
C)  pay lower wages but hire more workers. 
D)  pay higher wages and hire more workers.

Question 10

Which of the following is not true about a monopsonist?

Accepted Answer

A)  It can set the wage rate and hire any desired number of workers at that wage. 
B)  It is the only buyer of labor in a market. 
C)  It usually extracts rents from its monopsony power. 
D)  It determines the optimal employment-wage rate combination by equating the marginal revenue product of labor to the marginal cost of labor. 
E)  It usually has to bargain with unionized workers. 
A)  It can set the wage rate and hire any desired number of workers at that wage. 
B)  It is the only buyer of labor in a market. 
C)  It usually extracts rents from its monopsony power. 
D)  It determines the optimal employment-wage rate combination by equating the marginal revenue product of labor to the marginal cost of labor. 
E)  It usually has to bargain with unionized workers.

Question 11

Exhibit 11- 7 Demand for labor curves
​  
-​In Exhibit 11-7, which of the following could have caused the shift in labor demand from D1 to D2?​

Accepted Answer

A)  Increase in wages. 
B)  Decrease in wages. 
C)  Decrease in price of product. 
D)  Decrease in demand for the product. 
E)  Increase in the demand for the product. 
A)  Increase in wages. 
B)  Decrease in wages. 
C)  Decrease in price of product. 
D)  Decrease in demand for the product. 
E)  Increase in the demand for the product.

Question 12

Marginal revenue product is measured by:

Accepted Answer

A)  MR × price. 
B)  MR × MC. 
C)  TR / MP. 
D)  MP × price. 
E)  TC / MP. 
A)  MR × price. 
B)  MR × MC. 
C)  TR / MP. 
D)  MP × price. 
E)  TC / MP.

Question 13

Which of the following is the most accurate definition of a worker's "marginal revenue product"?

Accepted Answer

A)  The change in the firm's profits as the result of hiring an additional worker. 
B)  The change in the firm's total revenue as the result of hiring an additional worker. 
C)  The change in the firm's output as the result of hiring an additional worker. 
D)  The change in the firm's cost as the result of hiring an additional worker. 
A)  The change in the firm's profits as the result of hiring an additional worker. 
B)  The change in the firm's total revenue as the result of hiring an additional worker. 
C)  The change in the firm's output as the result of hiring an additional worker. 
D)  The change in the firm's cost as the result of hiring an additional worker.

Question 14

Marginal revenue product of labor measures the extra revenue generated to the firm from the employment of an additional worker.

Accepted Answer

A) True 
 B)False

Question 15

The profit-maximizing employment level for a monopsonist occurs where:

Accepted Answer

A)  wage = MFC. 
B)  wage = MRP. 
C)  price = wage. 
D)  wage = TWC. 
E)  MRP = MFC 
A)  wage = MFC. 
B)  wage = MRP. 
C)  price = wage. 
D)  wage = TWC. 
E)  MRP = MFC

Question 16

The optimal hiring rule is to employ labor up to the point where:

Accepted Answer

A)  wage = MFC. 
B)  wage = MP. 
C)  wage = MR 
D)  wage = MRP 
E)  wage = TWC. 
A)  wage = MFC. 
B)  wage = MP. 
C)  wage = MR 
D)  wage = MRP 
E)  wage = TWC.

Question 17

The MFC curve increases for a monopsonist because:

Accepted Answer

A)  hiring more workers raises total labor costs. 
B)  output price rises as a firm's market power increases. 
C)  hiring more workers does not affect wages. 
D)  the later workers hired are less productive. 
E)  as more workers are hired, all workers receive higher wages. 
A)  hiring more workers raises total labor costs. 
B)  output price rises as a firm's market power increases. 
C)  hiring more workers does not affect wages. 
D)  the later workers hired are less productive. 
E)  as more workers are hired, all workers receive higher wages.

Question 18

If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do?

Accepted Answer

A)  Stay at its current output level. 
B)  Hire additional workers. 
C)  Raise product prices. 
D)  Reduce employment. 
E)  Purchase new technology. 
A)  Stay at its current output level. 
B)  Hire additional workers. 
C)  Raise product prices. 
D)  Reduce employment. 
E)  Purchase new technology.

Question 19

The monopsonist's labor supply curve is the same as the:

Accepted Answer

A)  wage rate. 
B)  marginal revenue product curve. 
C)  marginal product curve. 
D)  market labor demand curve. 
E)  market labor supply curve. 
A)  wage rate. 
B)  marginal revenue product curve. 
C)  marginal product curve. 
D)  market labor demand curve. 
E)  market labor supply curve.

Question 20

Suppose a monopsonist wants to hire more workers. If it has to pay the same wage to all of its workers, the:

Accepted Answer

A)  marginal factor cost will fall while the wage will rise. 
B)  wage will fall while the marginal factor cost will rise. 
C)  difference between the wage and marginal factor cost will become smaller. 
D)  difference between the wage and the labor supply curve will increase. 
E)  wage and the marginal factor cost will increase. 
A)  marginal factor cost will fall while the wage will rise. 
B)  wage will fall while the marginal factor cost will rise. 
C)  difference between the wage and marginal factor cost will become smaller. 
D)  difference between the wage and the labor supply curve will increase. 
E)  wage and the marginal factor cost will increase.

A monopsonist can pick the , while a monopolist can pick .

The firm's demand for labor curve is exactly the same as the:

Exhibit 11-8 A labor market -If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point:

When a firm hires an additional unit of labor, the increase in a firm's total revenues is known as the marginal:

Explain how the presence of a superstar basketball player can increase the marginal revenue product of the other players on the team.

For a competitive firm, workers' marginal revenue product equals the marginal product of labor times the:

Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is a monopsony, the wage rate and number of workers employed will be determined at point:

As compared to a firm that competes for labor, a monopsony will:

Which of the following is not true about a monopsonist?

Exhibit 11- 7 Demand for labor curves -In Exhibit 11-7, which of the following could have caused the shift in labor demand from D₁ to D₂?

Marginal revenue product is measured by:

Which of the following is the most accurate definition of a worker's "marginal revenue product"?

Marginal revenue product of labor measures the extra revenue generated to the firm from the employment of an additional worker.

The profit-maximizing employment level for a monopsonist occurs where:

The optimal hiring rule is to employ labor up to the point where:

The MFC curve increases for a monopsonist because:

If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do?

The monopsonist's labor supply curve is the same as the:

Suppose a monopsonist wants to hire more workers. If it has to pay the same wage to all of its workers, the:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 11: Labor Markets

A monopsonist can pick the ____, while a monopolist can pick ____.

The firm's demand for labor curve is exactly the same as the:

Exhibit 11-8 A labor market -If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point: ​

When a firm hires an additional unit of labor, the increase in a firm's total revenues is known as the marginal:

Explain how the presence of a superstar basketball player can increase the marginal revenue product of the other players on the team.

For a competitive firm, workers' marginal revenue product equals the marginal product of labor times the:

Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is a monopsony, the wage rate and number of workers employed will be determined at point: ​

As compared to a firm that competes for labor, a monopsony will:

Which of the following is not true about a monopsonist?

Exhibit 11- 7 Demand for labor curves ​ -​In Exhibit 11-7, which of the following could have caused the shift in labor demand from D1 to D2?​

Marginal revenue product is measured by:

Which of the following is the most accurate definition of a worker's "marginal revenue product"?

Marginal revenue product of labor measures the extra revenue generated to the firm from the employment of an additional worker.

The profit-maximizing employment level for a monopsonist occurs where:

The optimal hiring rule is to employ labor up to the point where:

The MFC curve increases for a monopsonist because:

If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do?

The monopsonist's labor supply curve is the same as the:

Suppose a monopsonist wants to hire more workers. If it has to pay the same wage to all of its workers, the:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

A monopsonist can pick the , while a monopolist can pick .

Exhibit 11-8 A labor market -If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point:

Exhibit 11-9 A labor market -If the labor market shown in Exhibit 11-9 is a monopsony, the wage rate and number of workers employed will be determined at point:

Exhibit 11- 7 Demand for labor curves -In Exhibit 11-7, which of the following could have caused the shift in labor demand from D₁ to D₂?